Corporate Tax 2010 - BMR Advisors

Kilpatrick Stockton Advokat KB
Sweden
Sweden
Stamp duty group relief
Stamp duty on intra-group transfers or real property may be
postponed until the property of the company owning the property is
transferred outside the group. The parent company in the group
must be a Swedish company limited by shares or one of certain
other types of Swedish legal entities.
VAT group relief
For companies within the financial and insurance sector, there
exists a possibility to register a VAT group. Turnover between the
companies within the VAT group is not subject to VAT. In order for
a VAT-liable entity to qualify into the VAT group, the lion’s share of
this company’s turnover must be directed towards the entities
within the group. A VAT group may only contain a business
operator’s permanent establishment in Sweden.
4.6 Is tax imposed at a different rate upon distributed, as
opposed to retained, profits
Tax is not imposed at a different rate upon distributed, as opposed
to retained profits in Sweden.
5.3 Is there a participation exemption
A divestment through a sale of shares in a Swedish company or
partnership held by a non-resident owner is not subject to taxation
in Sweden.
For companies resident in Sweden or another EU State, capital
gains from the sale of business-related shares are exempt from
taxation. Non-quoted shares are considered business-related for
this purpose and consequently exempt from capital gains taxation.
A holding of shares in a quoted company is as a general rule
considered as not held for business reasons. However, a
shareholding representing at least 10% of the votes in the company
can be considered held for business reasons and therefore not
subject to capital gains taxation. For shares in quoted companies to
be tax-exempt upon divestment, there is also a holding time
requirement of one year.
5.4 Is there any special relief for reinvestment
There are no particular regimes for such relief in the business sector.
4.7 What other national taxes (excluding those dealt with in
“Transaction Taxes”, above) are there - e.g. property taxes,
etc.
Real property tax is levied on real property. All properties are
assigned a tax assessment value which should correspond to 75% of
the market value. The tax assessment value is the base for the tax
rate. The tax rate is dependent on the use of the property and varies
between 0.2% and 1.0%. The real property tax is deductible for
income tax purposes, but it is the Swedish market standard that the
tenants compensate the landlord for the real property tax. Real
property used for residential purposes are exempted from real
property tax. Instead, they are subjected to a limited municipal tax.
At a maximum the municipal tax will be SEK 6,000 for every
detached house alternatively SEK 1,200 for every flat.
4.8 Are there any local taxes not dealt with in answers to
other questions
No, there are no other local taxes not dealt with in the answers to
earlier questions.
6 Branch or Subsidiary
6.1 What taxes (e.g. capital duty) would be imposed upon the
formation of a subsidiary
There are no taxes imposed upon the formation of a subsidiary.
6.2 Are there any other significant taxes or fees that would be
incurred by a locally formed subsidiary but not by a
branch of a non-resident company
A Swedish subsidiary will be liable to Swedish corporate tax on its
worldwide income. A non-resident company with a branch
constituting a permanent establishment in Sweden will only be
taxed on the income derived directly or indirectly from the
establishment; see question 6.5. A non-resident company is further
liable to Swedish tax on income and capital gains from real property
in Sweden.
6.3 How would the taxable profits of a local branch be
determined
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5 Capital Gains
5.1 Is there a special set of rules for taxing capital gains and
losses
Corporation tax is levied on all income, which includes business
income and capital gains. However, capital gains are computed
according to special rules although taxed as general business
income. Further, capital losses on quoted shares are only deductible
against gains on such shares. Such losses that cannot be deducted
against gains in a fiscal year are carried forward indefinitely.
5.2 If so, is the rate of tax imposed upon capital gains
different from the rate imposed upon business profits
No, the rate of tax imposed on capital gains is not different from
that imposed on business profits.
The taxable profits of a Swedish branch of a non-resident company
will, as long as it is a permanent establishment (the Swedish
definition is based on article 5 of the OECD Model Convention) be
determined in the same way as for any other taxable Swedish
person, that is on a net basis according to the general rules for
computing business income in the Swedish Income Tax Act; see
question 4.3 above. Only the part of the non-resident company’s
profits that is attributable to the branch is taxable in Sweden. This
means that all income and costs of the non-resident company
attributable to the branch must be allocated to the branch, including
overhead costs.
A non-resident company is also entitled to tax relief in respect of its
Swedish branch in the same way as resident taxable persons are
entitled to tax relief, such as by allocation to the tax allocation
reserve. Further, a company resident in another EEA State may
receive tax-free dividends from business-related shares under the
same conditions as Swedish companies, provided that the dividends
are attributable to the branch; and EEA companies may also be a
part of the group contribution system in the same way as Swedish
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